The row harks back to the libel action taken by Albert Reynolds against the British newspaper The Sunday Times.

The disputed article had been published only in the British editions, and omitted from the Irish edition of the paper, in November 1994, just after the Fianna Fail-Labour coalition fell, under the headline 'Goodbye Gombeen Man'.

A report yesterday stated that Mr Finlay, an adviser to Labour leader Dick Spring in three governments through the 1980s and 1990s, had been on standby to testify in that libel trial in 1996 at the High Court in London but was never called. Yesterday's report further stated that, according to an advance copy of Mr Finlay's statement, he was ready to describe Mr Reynolds as "irredeemably corrupt".

The Sunday Independent reported that it could not relay Mr Finlay's witness statement comments in full back in 1996 without risking a libel suit by Mr Reynolds. A report was only possible now because of the former Taoiseach's death.

Reacting to yesterday's reports, Mr Finlay insisted that he had never, ever, believed Mr Reynolds was "irredeemably corrupt" and never said such a thing. He said that he had believed that Mr Reynolds' proposed actions as Taoiseach trying to resolve a government crisis in November 1994 would have done irreparable damage to high offices of state.

"I never believed he was 'irredeemably corrupt'. If somebody were irredeemably corrupt it would mean they were guilty of criminal acts and I never believed that of Albert Reynolds," Mr Finlay told the Irish Independent.

The late Taoiseach technically won his 1996 case against the British Sunday newspaper but was awarded just one penny for damage to his reputation.

The award was about to be subject to another trial in 2000 when it was announced the case was settled but the total legal bill was estimated at IR£1.5m or €1.8m.